Stocks consolidated in a narrow band on Monday even as traders shifted their attention to a potential merger in the hyper competitive telecom space and on several companies that reported their third quarter earnings.
The biggest corporate news of the day was an announcement by Vodafone Plc that it's Indian operation was in talks to merge smaller rival Idea Cellular via a stock-swap deal. Idea surged 26 per cent. It is not immediately clear how the financials will work out. Unlisted Vodafone said it will get fresh shares of Idea Cellular from the company's diversified parent, the Aditya Birla group. A potential merger will catapult the combined entity to the top slot in the booming sector. This deal will also result in the backdoor listing of Vodafone's Indian operations on the exchanges, subject to regulatory approvals.
Meanwhile, the Nifty closed 9 points lower at 8,633 points as the index snapped a 4-day winning streak. The index is now consolidating at a 13-week high, just ahead of the union budget's presentation on February 1st.
Here are the major trading events of the day:
* The Sensex fell 26 points to 27,857 points on the Bombay Stock Exchange. Bharti Airtel was the top gainer on the index while Tata Motors lost the most. State Bank was the top traded share by value on the Sensex.
* Telecom tower giant Bharti Infratel was the top loser on the Nifty, on fears that the merger between Vodafone India and Idea Cellular will lead to rationalisation of networks on Infratel's towers. Bharti Infratel closed 7.3 per cent lower at 328.10 rupees. Also on the list of losers were Aurobindo Pharma, Tata Motors, Tata Steel and IndusInd Bank. They lost 1.5-2.6 per cent and were among 33 shares that dropped on the Nifty.
* Idea Cellular jumped 26 per cent to 98.10 rupees, rising for the 7th day in a row. Idea clocked its volumes of 15.1 crore shares on the NSE, its highest since June 3rd. Nearly Rupees 1,426 crore worth of stock was traded. Idea topped nearly all charts: its was the top gainer, the top traded by value and the top traded by volume on the NSE.
* Idea's larger rival Bharti Airtel gained 6.6 per cent to 345 rupees on expectations that a merger will allow pricing sanity to return to the telecom market. Idea's larger group companies — Grasim and Hindalco — also surged as they hold substantial minority stakes in the telecom major.
* Grasim, Reliance Industries and Dr. Reddy's rose 0.8-4 per cent and were among 18 gainers on the Nifty.
* Bharti Airtel, Infosys and Bajaj Finance, post earnings, were the most traded stocks by value on the NSE.
* Reliance Communications, JP Power and Mercator were the top traded stocks by volume.
* Broader markets were flat with the Nifty 100, 200 and 500 indices ending barely changed. There was little or no activity on the mid cap and small cap markets.
* The trend was mostly weak in the sectoral space with losses ranging between 0.1-0.9 per cent on Auto, banking, FMCG, Software and metal stocks.
* The bears came back into reckoning on the markets after a 4-day absence with 972 shares declining versus just 659 that rose.
* The mood was equally dull in the derivatives market where 110 futures lost ground versus 67 that rose. Among the gainers were futures of Cadila, Bharat Electronics, Castrol, Tech Mahindra and JSW Steel.
* Bajaj Finance reported strong profit growth for the 3rd quarter, helping its shares surge 5.7 per cent. However, HDFC's earnings in the October-December period were tepid.